Chairwoman of the House Financial Services Committee Rep. Maxine Waters.
Facebook’s plans to launch a new cryptocurrency in 2020 is already raising the eyebrows of US lawmakers. Rep. Maxine Waters, who chairs the House Financial Services Committee, on Tuesday called on Facebook to pause its development of a new digital coin called Libra, citing the company’s seemingly endless list of scandals. The company is working with 27 partners to launch Libra, which is expected to be released along with a new digital wallet that works with Messenger and WhatsApp. Users will be able to use Libra to purchase products, send money across borders or make donations. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters said in a statement. “The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers and the economy. Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies,” she added.The lawmaker’s remarks highlight some of the regulatory hurdles the social media giant could face as it moves forward with its plans to launch Libra. Waters, a California Democrat, said Facebook “has repeatedly shown a disregard for the protection and careful use of this data.” The social media company could face a record-setting fine of up to $5 billion from the Federal Trade Commission, which has been investigating Facebook for allegedly failing to protect user privacy. Last year, revelations surfaced that UK political consultancy Cambridge Analytica harvested the data of up to 87 million users without their permission. She wants Facebook to halt its Libra project until Congress and regulators examine some of the issues she outlined in the statement. Rep. Patrick McHenry, a top Republican on the House Financial Services Committee, also requested a hearing on Facebook and its cryptocurrency project. Waters said in her statement that Facebook executives should testify before the committee. This isn’t the first time lawmakers have expressed concerns about Facebook’s cryptocurrency plans, which could keep users on the platform longer and generate revenue outside of advertising. In May, lawmakers with the Senate Committee on Banking, Housing and Urban Affairs asked Facebook to answer questions about its cryptocurrency project, including what privacy and security protections will be available to consumers. As of Wednesday afternoon, the committee still hadn’t received responses from the social network. The Senate committee scheduled a hearing titled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations” on July 16 at 7 a.m. PT. Witnesses haven’t yet been announced.Facebook didn’t respond to a request for comment.Originally published June 18, 4:03 p.m. PT.Update, June 19: Adds information about a Senate hearing scheduled in July.
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